Correlation Between Khosla Ventures and Power Digital
Can any of the company-specific risk be diversified away by investing in both Khosla Ventures and Power Digital at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Khosla Ventures and Power Digital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Khosla Ventures Acquisition and Power Digital Infrastructure, you can compare the effects of market volatilities on Khosla Ventures and Power Digital and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Khosla Ventures with a short position of Power Digital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Khosla Ventures and Power Digital.
Diversification Opportunities for Khosla Ventures and Power Digital
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Khosla and Power is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Khosla Ventures Acquisition and Power Digital Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Digital Infras and Khosla Ventures is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Khosla Ventures Acquisition are associated (or correlated) with Power Digital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Digital Infras has no effect on the direction of Khosla Ventures i.e., Khosla Ventures and Power Digital go up and down completely randomly.
Pair Corralation between Khosla Ventures and Power Digital
Given the investment horizon of 90 days Khosla Ventures Acquisition is expected to generate 0.59 times more return on investment than Power Digital. However, Khosla Ventures Acquisition is 1.69 times less risky than Power Digital. It trades about 0.14 of its potential returns per unit of risk. Power Digital Infrastructure is currently generating about 0.07 per unit of risk. If you would invest 996.00 in Khosla Ventures Acquisition on September 28, 2024 and sell it today you would earn a total of 66.00 from holding Khosla Ventures Acquisition or generate 6.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.56% |
| Values | Daily Returns |
Khosla Ventures Acquisition vs. Power Digital Infrastructure
Performance |
| Timeline |
| Khosla Ventures Acqu |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Power Digital Infras |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Khosla Ventures and Power Digital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Khosla Ventures and Power Digital
The main advantage of trading using opposite Khosla Ventures and Power Digital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Khosla Ventures position performs unexpectedly, Power Digital can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Power Digital will offset losses from the drop in Power Digital's long position.The idea behind Khosla Ventures Acquisition and Power Digital Infrastructure pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |